PowerCompute (PWCM) Q4 2022 earnings summary

Executive summary

• Revenue rose 92.9% YoY to $1.7M as Bitcoin mining began in late September; net loss attributable to LM Funding America was $29.2M versus $4.8M net income in 2021.

• Results reflected $16.6M in stock-option expense, including $5.3M accelerated on executive option cancellations, plus mining-related deposit impairments.

Financial highlights

• 2022 operating costs and expenses were $26.4M, up $17.1M YoY; operating loss was $24.7M versus $8.4M in 2021.

• Net loss before tax was $26.4M; income tax expense was $1.4M, including the effect of a change in the estimated use of net operating loss carryforwards.

• Mining-related impairments totaled $4.9M: $3.15M for undelivered equipment deposits and $1.79M for prepaid hosting deposits; purchased digital assets had $0.47M of impairment.

• Operating cash use was $9.1M; investing cash use was $18.9M, including $14.7M in mining-equipment deposits and $3.7M in SeaStar Medical notes receivable.

Outlook and guidance

• Plans called for continued hash-rate growth through 2023 and beyond; as of March 27, 2023, approximately 3,700 miners represented 0.37 EH/s, with 1,900 machines in storage awaiting hosting.

• An additional 190 S19 XP miners were fully prepaid and expected in April 2023; hosting agreements added capacity for 228 machines with Phoenix and 500 with Longbow.

• Core had energized 2,978 machines at approximately 0.30 EH/s as of March 27, 2023; its Chapter 11 filing had not disrupted mining at its sites by that date.